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Exhibit 10.1
INDEMNITY AGREEMENT
THIS AGREEMENT is effective as of January 1, 2007.
BETWEEN :
OILSANDS QUEST INC. , a corporation
incorporated under the laws of
Colorado, having its head office in the City of Calgary (the
"Corporation")
- and -
[•] of Calgary, Alberta, Canada
(the "Indemnified Party")
RECITALS:
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1.
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The Indemnified Party is, or has agreed to act
as, a director or officer of the Corporation and/or is acting or
may, at the Corporation’s request, act in an Authorized
Capacity of Another Entity and the Corporation wishes the
Indemnified Party to serve or continue in such capacity;
and
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2.
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In order to induce the Indemnified Party to serve
or continue to provide services to the Corporation or Another
Entity, the Corporation wishes to provide for the indemnification
of, and advancement of expenses to, the Indemnified Party to the
maximum extent permitted by applicable law.
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NOW
THEREFORE , in consideration of the premises and mutual
covenants herein contained, and in consideration of the Indemnified
Party agreeing to act, or to continue to act, as a director or
officer of the Corporation or in an Authorized Capacity with
Another Entity, the Corporation and the Indemnified Party do hereby
covenant and agree as follows:
1. Definitions
1.1 As used in this Agreement, including the Recitals:
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(a)
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"Act" means the Colorado Business Corporation
Act, as amended;
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(b)
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"Advance" means an advance of Expenses to the
Indemnified Party pursuant to Section 3;
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(c)
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"Another Entity" means a corporation,
partnership, joint venture, trust or unincorporated association or
organization of which the Indemnified Party serves in an Authorized
Capacity at the request of the Corporation;
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(d)
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"Authorized Capacity" means a director or
officer, or a similar capacity, of a Another Entity;
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(e)
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"By-Laws" means the by-laws of the
Corporation;
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(f)
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"Court" means the Court of Queen’s Bench of
the Province of Alberta;
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(g)
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"Expenses" means all costs, charges and expenses
incurred by the Indemnified Party in respect of any Proceedings
including, without limitation, reasonable fees and disbursements of
counsel and other professional fees and out-of-pocket expenses for
attending discoveries, trials or hearings and meetings to prepare
for such proceedings, but shall not include Loss;
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(h)
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"Liabilities" means the Expenses and Loss
incurred by the Indemnified Party in respect of any
Proceedings;
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(i)
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"Loss" means amounts which the Indemnified Party
is legally obligated to pay as a result of a Proceeding against the
Indemnified Party including amounts paid to settle an action or
satisfy a judgment or to satisfy any fines or penalties levied in
respect of such Proceedings, but shall not include Expenses;
and
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(j)
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"Proceedings" means any threatened, pending or
completed civil, criminal, administrative, investigative or other
proceeding (including formal and informal inquiries and hearings),
whether or not charges have been laid against the Corporation or
Another Entity or the Indemnified Party, in which the Indemnified
Party is involved by reason of the Indemnified Party’s
association with the Corporation or Another Entity, or by reason of
anything done or not done by the Indemnified Party in the capacity
as a director or officer of the Corporation or in an Authorized
Capacity with Another Entity.
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2. Indemnification
2.1 Except in respect of an action referred to in
Section 2.2 and subject to Section 2.3, the Corporation
shall indemnify and save harmless the Indemnified Party from and
against all Liabilities, actually and reasonably incurred by the
Indemnified Party in respect of any Proceedings if:
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(a)
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the Indemnified Party acted honestly and in good
faith with a view to the best interests of the Corporation or
Another Entity, as the case may be; and
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(b)
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in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, the
Indemnified Party had no reasonable grounds for believing that the
Indemnified Party’s conduct was unlawful.
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2.2 In respect of any action by or on behalf of
the Corporation or Another Entity to procure a judgment in its
favour, to which the Indemnified Party is made a party by reason of
being or having been a director or officer of the Corporation or
serving in an Authorized Capacity with Another Entity, or by reason
of anything done or not done by the Indemnified Party in any such
capacity, the Corporation shall, with the prior approval of the
Court, indemnify and save harmless the Indemnified Party against
all Expenses actually and reasonably incurred by the Indemnified
Party in connection with such Proceedings if the Indemnified Party
fulfils the conditions set out in Sections 2.1(a) and
(b) above. The Corporation agrees to make
application
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to the Court for approval of such indemnification and to use
reasonable commercial efforts to obtain approval to such
indemnification.
2.3 Notwithstanding any other provision of this Agreement, the
Corporation shall not be obligated to:
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(a)
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indemnify the Indemnified Party or make Advances
with respect to Proceedings initiated or brought voluntarily by the
Indemnified Party and not by way of defence, except (i) with
respect to Proceedings to enforce a right to indemnification or
Advance pursuant to this Agreement, or (ii) in specific cases
if the Board of Directors of the Corporation has approved the
initiation of such Proceedings; or
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(b)
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indemnify the Indemnified Party in respect of any
amounts the payment of which by the Corporation is not permitted by
applicable law.
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2.4 For the purposes of this Agreement, the
termination of any Proceedings by judgment, order, settlement or
conviction, or similar or other result shall not, of itself, create
any presumption for the purposes of this Agreement that the
Indemnified Party did not act honestly and in good faith with a
view to the best interests of the Corporation or Another Entity, as
the case may be, or that, in the case of a criminal or
administrative action or proceeding that is enforced by monetary
penalty, the Indemnified Party had no reasonable grounds for
believing that the Indemnified Party’s conduct was unlawful,
unless the judgement or order of the court or other competent
authority shall specifically find or determine
otherwise.
2.5 In respect of any claim for indemnification pursuant to this
Agreement, the Corporation may not indemnify the Indemnified Party
unless a determination is made that the Indemnified Party acted
honestly and in good faith and with a view to the best interests of
the Corporation or Another Entity, as the case may be, and, in the
case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, to have had no reasonable grounds
for believing that his (her) conduct was unlawful. The
determination shall be made either: (1) by a majority vote of
the board of directors present at a meeting at which a quorum is
present, and only those directors not parties to the Proceedings
shall be counted in satisfying the quorum; (2) if a quorum
cannot be obtained, by a majority vote of a committee of board of
directors designated by the board of directors, including the
directors who are parties to the Proceedings, which committee shall
consist of two or more directors not parties to the Proceedings;
(3) if a quorum cannot be obtained under (1) and a
committee cannot be established under (2), then the determination
shall be made by independent legal counsel selected by a majority
vote of the full board of directors, or by the shareholders.
2.6 If the Indemnified Party is entitled under this Agreement to
a portion but not all of the benefit of the indemnification
provided hereunder, the Corporation shall indemnify the Indemnified
Party for the portion thereof to which the Indemnified Party is
determined to be entitled.
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3. Advance Of Expenses
3.1 Subject to Section 2.3, the Corporation shall advance
moneys to the Indemnified Party for Expenses of the Indemnified
Party reasonably incurred in respect of any Proceedings referred to
in Section 2.1, as may be appropriate to enable the
Indemnified Party to properly investigate, defend, participate in
or appeal such Proceedings.
3.2 The Corporation shall seek Court approval to the advance of
moneys to the Indemnified Party for Expenses reasonably incurred by
the Indemnified Party in respect of Proceedings referred to in
Section 2.2.
3.3 In the event that it is ultimately determined that the
Indemnified Party was not entitled to be indemnified, or was not
entitled to be fully indemnified, for any Liabilities in any
Proceedings in respect of which Advances have been made under
Section 3.1 or 3.2, the Indemnified Party shall reimburse the
Corporation for such Advances or portion of such Advances.
3.4 An Advance shall be made by the Corporation upon receipt of
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(a)
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a written request for Advance containing
sufficient detail of the Proceedings and Expenses to enable the
Corporation to determine whether and the extent to which the
Indemnified Party is entitled to an Advance;
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(b)
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copies of all receipts, invoices and other
supporting material reasonably required by the Corporation
(including in the case of legal or other professional advisors, a
detailed description of the services rendered) in respect of the
Expenses;
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(c)
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a written acknowledgement of the Indemnified
Party’s obligation to reimburse the Corporation for the
amount of all Advances if it is determined that the Indemnified
Party was not entitled to be indemnified or fully indemnified for
Expenses in respect of which Advances were made by the Corporation;
and
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(d)
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a written affirmation that, based on facts known
to the Indemnified Party and in relation to the matter giving rise
to the request for the Advance, the Indemnified Party in good faith
believes that the Indemnified Party:
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(i)
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acted honestly and in good faith with a view to
the best interests of the Corporation or, as the case may be, to
the best interests of Another Entity for which the Indemnified
Party acted in an Authorized Capacity; and
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(ii)
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in the case of a criminal or administrative
proceeding that is enforced by a monetary penalty, the Indemnified
Party had no reasonable grounds for believing that his or her
conduct was unlawful.
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(e)
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a determination that is made pursuant to
Section 2.5 that the facts then known will not preclude
indemnification under this Agreement.
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3.5 The Corporation shall make such Advance
within 30&nbs
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